Hydro Strains Grid in California, But Natural Gas Fills Gap

Even though California is experiencing one of the most severe droughts on record affecting the state’s hydroelectric generation, the state is projected to still have adequate electricity this summer, according to California ISO’s “2014 Summer Loads & Resource Assessments” report.

As of April 29, 2014, the statewide hydrologic conditions were summarized as: 56 percent of average precipitation; 20 percent of average snowpack water content; and 63 percent of average reservoir storage, says the report. These drought conditions will limit the capability of the state’s hydroelectric resources and may cause up to 1,150 MW of thermal units to shut down due to water supply curtailments.

However, these potential supply limitations should not materially impact the reliability of the ISO system this summer due to significant generation additions, sufficient energy imports, and moderate peak demand growth. The main impact from the drought during 2014 summer will be an increase in natural gas generation, which could result in an increase in energy prices. However, the unusually dry conditions across the state do create a heightened risk of wildfires, which could impact the use of major transmission lines during periods of critical summer peak demand. Thus, wildfires could create grid reliability challenges over the summer.